FM Sitharaman highlights ₹16 lakh crore capex drive, reinforcing focus on asset creation

The government's capital expenditure, including the outlay outlined in the 2025 Budget and resources from PSUs, is close to ₹16 lakh crore, underscoring the Centre’s continued focus on building capital assets, Union Finance Minister Nirmala Sitharaman said during a post-budget interaction with industry stakeholders in Mumbai today.

“If I include public sector enterprises’ own resources—about ₹4.5 lakh crore or ₹4.8 lakh crore—into the Centre’s ₹11 lakh crore, which has now increased to ₹11.21 lakh crore, the total capital expenditure is close to ₹16 lakh crore,” Sitharaman said at the conference.

She added that the Centre’s emphasis on asset building is further reinforced by setting the capex target for this fiscal year 10.2% higher than the previous year.

“The capex outlined in the budget is at least 10.2% more than last year, meaning ₹11.11 lakh crore compared to the previous ₹11 lakh crore from the July budget,” Sitharaman said.

However, Sitharaman affirmed that with the latest tax reforms, the government aims to boost consumption, though this does not indicate a reduced focus on capital expenditure.

She stated that the government will prioritise reducing the debt-to-GDP ratio by cutting borrowing while adhering to the fiscal glide path established in July.

“Our borrowings are essentially directed towards asset building, which is why the capital expenditure-to-GDP ratio closely aligns with the fiscal deficit. This proves that if we borrow, it is to create assets,” Sitharaman said.

She assured that while every effort will be made to reduce debt, it will not impact any of the government’s ongoing programmes.

Sitharaman further noted that thousands of regulations have been removed to ease business operations, alongside relaxations aimed at supporting the manufacturing sector through initiatives like the Production-Linked Incentive (PLI) scheme. Additionally, she revealed that the Income Tax Bill 2025 has been referred to a select committee for further review.

Addressing reforms in the insurance sector, Sitharaman emphasised the need to increase foreign direct investment (FDI) limits to encourage more players and deepen the market. While the government is taking steps to attract new entrants, she stressed that consumer protection guardrails are being implemented to ensure their safety.